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You might assume that it is the case that if you are a young person, particularly under the age of 25, that it may well be difficult to get access to finance. This is usually owing to the lack of credit history young adults tend to typically have, which in some cases, can make it harder to get accepted for a loan.
However, it is definitely far from impossible! Here at Proper Finance, we work with a variety of leading, reputable and FCA authorised lenders, many of whom would be willing to grant loans to young people.
Before we get to what type of loan you should choose (there isn’t just one category), we will explain in detail in this guide the options that you have available to you, so that you can then make an informed decision as to what is the best option for you in your personal circumstances.
Generally speaking, it can be just that little bit harder for young people to get approved for a loan. This can be for a whole host of reasons, such as being seen as more of a risk to lenders due to their lack of credit history, a lack of a steady income to provide to lenders, or perhaps as they have little, or perhaps no experience whatsoever, of paying back debt so far.
Of course, if you are young and have experience of having a credit card, as well as paying back any debt you have and have a reliable income, getting accepted for a loan is likely to be easier for you.
As a rule of thumb, you will find that getting approval for a loan if you are under the age of 25 is the most difficult. However, it works in the same way for those who are over the age of 60, who can also find it testing when it comes to getting accepted for finances.
Typically, lenders consider that there are ‘prime ages’ for borrowing, and this is largely down to risk factors usually associated with age. This means that lenders believe the older you are, the less likely you are to be able to make repayments in full back (to be particularly morbid…because there is a higher likelihood you will die). Meanwhile, for youngsters, the issue is more down to the lack of experience you have.
No, but unfortunately many do. Not because they have been reckless with their spending, but simply due to never having taken out a loan before. You can build your credit score in many ways, for example using a special credit card designed for this purpose.
Yes, but it can be very difficult to get accepted for a loan if you have bad credit. There are specialist loan products available for people with bad credit, but the interest rates and fees can be much steeper. This means that if you have previously struggled with bad credit, you may want to spend some months rebuilding your credit history before you consider applying for a loan.
Getting a copy of your credit file from a credit reference agency is a great first step. This enables you to see your credit score. If you have a higher score, your chances of getting accepted will be greater, but if you have a lower score this is just a signal that you can spend some time improving it.
Here are some things that young people can do to improve their credit score, and therefore increase their chances of getting a loan:
In terms of the lenders that Proper Finance works with, they will require someone to be at least over the age of 18 in order to apply. However, in certain cases, it may be required that a borrower is over the age of 21 in order to be granted a loan.
Whilst getting accepted for a loan is not always an easy feat, it is still possible. For example, you could look at getting any of the following:
Considered your options and now looking to make an application for a loan specifically for young people? Proper Finance can help you today. All we require from you is to click apply now on our website, fill in our online form which takes less than 10 minutes, and we can help you find the right loan for you. No need to spend hours perusing the web to try and find the best one, we do all the hard work on your behalf! So, get in contact with us today!